The Early Bird Gets the Worm

Everyone should get started on saving for retirement as early as they can. Because of how quickly time and inflation shrink the value of money, a savings account won’t cut it. Whatever amount you save will be worth much, much less by the time you retire (unless you’re retiring in the next couple of years).

The way you beat that shrinkage factor is to invest your money—and invest it as early as possible. The return in the stock market will, depending on performance, enable your investment to outrun inflation’s tendency to shrink the value of your money.

Because time is the most crucial ingredient for this magic, it’s imperative you start early. You can see just how important it is by using the slider below.

What it shows: how much you would have at age 65 if you contributed $2,000 a year toward your retirement starting at that age and if your investments grew by 8% a year (not adjusted for inflation). As you can see, in the younger ranges, starting even just one year earlier can mean a difference of tens of thousands of dollars by the time you retire.

The Early Bird Gets The Return

By 65 you will have:

$0.00

20

65

This chart does not take into account the performance of the market, inflation or any taxes that might be levied on the retirement account.

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LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment advice. Please consult a financial adviser for advice specific to your financial situation. LearnVest Planning Services and any third-parties listed, discussed, identified or otherwise appearing herein are separate and unaffiliated and are not responsible for each other’s products, services or policies. LearnVest, Inc. is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.